Is there any problems/catches with Multiple accounts??

[Guest JaykeSnake]

Hi all, Just a quick question. If I were to say have 2 accounts, a Roth IRA and a 401k. Is there a maximum limit I can contribute overall or are they treated as 2 accounts? Where I could contribute 2k max to the Roth and say Max Percent to my 401k.

Any and all help appriciated. I've also heard that I could run into tax issues later on, but I'm sorta confused on what issues those could be.

[Guest Steve Palmer]

Your Roth and 401(k) would be treated as two separate accounts with their own limitations on contributions. Your ability to contribute to the Roth is not affected by your participation in the 401(k). The Roth generally requires that you have earned income and that your adjusted gross income is below the prescribed levels based on filing status. The 401(k) elective deferral limit was raised to $11,000 for 2002, but you may want to check with your plan administrator to make sure you do not go over the percentage limitations.

Not sure what you mean by "tax issues later on". Can you be more specific?